On FNS, Treasury Secretary Henry Paulson was reassuring, but could not rule out that there might have to be more bailouts/seizures. He explained that we will “work through this,” as we had with so many problems in the past.
Next on FNS, Chuck Schumer promised that the Dems would not “Christmas Tree” the bailout/seizure bill but that he did want to include mortgage relief. Jon Kyl told him that Congress had already passed mortgage relief.
On ABC’s TW, when asked if this bailout/seizure we “socialism,” Secretary Paulson responded: “This is big government interventionism. … It’s necessary right now.”
Next up, Chris Dodd demanded this and that while John Boehner said that it was time to put aside ideology and act like adults.
On MTP, moderator Tom Brokaw is trying, but he’s often confused. Secretary Paulson had to explain to him that the difference between his proposed scheme and Resolution Trust Corporation (RTC) is that the former was created to take over the debts of insolvent lending institutions, while this time, the government had prevented such failure.
Next on MTP, Mike Bloomberg backed Paulson as being the right guy in charge. Brokaw argued for a separate agency, like Roosevelt’s RTC, to run this system and he asked Bloomberg to do it. He asked Bloomberg if he’d manipulate the rules to seek a third term, and Bloomberg quipped that he wanted to be host of Meet the Press.
On CBS’ FTN, Paulson said that they are asking foreign governments to help in this crisis, as it is an international problem. Next, Senator Richard Shelby said that this crisis was caused by greed and a lack of regulations. We need more regulations. As Schieffer was leaving the segment, Barney Frank interrupted to say a “Sunday morning… Amen to Senator Shelby.” Schieffer opined that it was worth the interruption just to hear him say this.
ON CNN’s LE, it was Rob Portman for McCain and Gene Sperling for Obama. Sperling’s talking point was that John McCain has always been for less regulation of the financial markets, and now even a “conservative Administration” (Bush’s?) was forced to admit that it needed more rules and regulations. Portman countered that McCain had always favored “smarter, tougher regulations.” Sperling argued that Obama had foresaw months ago that this crisis was coming, but McCain had only called for less regulation; Portman reminded that McCain foresaw this two years ago and proposed legislation which Obama rejected.
PAULSON ON FNS. First up for host Chris Wallace on FOX News Sunday was Treasury Secretary Henry Paulson, a.k.a. the Man with the Plan. Said the secretary: “The markets are fragile. We have a serious situation. … We have to more quickly.” To stabilize the markets. He cannot say that there will not have to be more bailouts/seizures, but he said that we will “work through” this problem, as we always work through problems. He said that the American taxpayer “is at risk,” and his job is to protect the American taxpayer.
The federal government will purchase bad assets now eventually to sell them. There is no guarantee, Paulson said, that these assets will ever be worth anything. He’s a free market guy, he assures us, and: “I have that we have to do it.”
Wallace asked him if the taxpayers will “get a piece of the action” once this firms have been rescued and become profitable. (This would mean real nationalization of the institutions.) He also asked if the salaries of the executives at these firms would be limited. Paulson answered that “pay should be for performance, not failure,” but that we’ll get to the regulation later. Paulson did not say that the federal government would eventually profit from the markets which they ultimately control.
Paulson said that this action should be clean and quick: “It’s urgent that we get this done.” He said that there should be a mortgage relief component to this.
KYL AND SCHUMER ON FNS. Next up on FNS were Senators Jon Kyl (R-Arizona) and Chuckie Schumer (D-New York). Schumer said that Paulson’s plan was good as far as it goes, but it needs to be changed to put taxpayers first and to spend money “in a fair way.” He promised that they “will not Christmas Tree this bill,” tossing their wish lists of programs onto the bill’s pile of promises. He said that the bill should contain a mortgage relief component, but though we need another stimulus package, Chuckie pronounced, it will be passed “alongside” the bill currently being discussed.
Senator Kyl said that we first had to “put the fire out” before doing extraneous things, and he pointed out that the Congress had already passed a mortgage relief bill. He predicted that there was a 50/50 chance that this will be done in a week. Schumer countered that the chances of it getting done were better than fifty-percent, as Paulson would allow Democrats to change the bill. He stressed what he called “THO”: Taxpayers, Homeowners, Oversight.
Host Wallace played the clip of Joe Biden declaring that tax increases were patriotic. Kyl responded that “this is the last time in the world” to raise taxes on either the middle class or those who invest in the economy. Kyl added that the desire to make money cannot be “unbridled.” He holds that “it has to be controlled.”
PAULSON ON TW. Treasury Hank Secretary Paulson was also host George Stephanopoulos’s guest on ABC’s This Week. Steph tried to equate the bailout/seizure spending with federal spending for such as health care and social security. Paulson rejected that argument, explaining that the bailout/seizure will leave the federal government with assets that can be sold, although he estimated that the proceeds of the eventual sale will be well below what the federal government pays for them.
Paulson said that they want to help homeowners who want to stay in their homes and can meet their obligations to say in their homes.
Steph asked him if his plan were socialism. Paulson answered: “This is big government interventionism. … It’s necessary right now.” He said that he is “one man doing the best I know how for the American people.”
BOEHNER AND DODD ON TW. Steph’s next guests were House Republican Leader John Boehner and Senate Banking Committee Chairman Chris Dodd. Boehner posited that this was bailout/seizure was not about Wall Street; rather, he said, it was about protecting the economy, American jobs, etc. He said: “This is no time for ideological purity.”
Dodd argued that there had to be some reciprocity from the firms being saved. He demanded that Congress basically rewrite the bailout/seizure proposal to suit the Dem fancy.
When reminded that Congressman Mike Pence (R-Ohio) had issued a statement opposing the bailout/seizure, Boehner said he would too if this weren’t about our “life, our society, our economy.” Boehner argued that “we need to rise above partisan politics and deal with this as adults.” He later argued against Dodd’s Kitchen Sink/Christmas Tree approach to the bill: “We don’t need 535 members of Congress adding their best ideas to this bill.”
PAULSON ON MTP. Moderator Tom Brokaw told Treasury Secretary Hank Paulson that “this is the biggest financial play in the history of any economy any time in the world.” Brokaw said that if Paulson were still heading Goldman Sachs and took this to the board of directors, they’d send him out of the room. Paulson said that he doesn’t look at it this way. This is something we had to do because of the “excesses building up for some time in this country.” We need to stabilize the markets for the benefit of the taxpayers.
Paulson blamed this one excesses and over-complexity, as well as irresponsible practices.
Brokaw sites the glossy Newsweek weekly calling Paulson, “King Henry.” And he quotes Senator Richard Shelby as fuming that he’s not going to rubberstamp anything. Brokaw demanded, on behalf of the taxpayer, answers regarding the value of the assets being purchased and how much they’d get back from the banks. Paulson said that there were a lot of questions but this was an “urgent matter and we had to move quickly.” He explained that this was not taxpayer “expenditure,” as the assets would be resold, at which point the money would come back into the Treasury.
Paulson said that we would work through this. He added that he wouldn’t “bet against the American people” or the “long term fundamentals of this country.” He called seeing the fragility in the market, a “humbling experience.”
Brokaw stipulated that Paulson wanted this entire thing to be run by the Treasury Department, and he argued, “with all due respect to you Mr. Secretary, you and the fed have been wrong up to this point, [so] what we need” is to dig up Franklin Roosevelt’s retrograde notions and create a separate, non-partisan agency headed by Mike Bloomberg. Paulson said that he has to move quickly, and he thinks his plan will work immediately. Future Administrations, he said, would have the flexibility to deal with it as they saw fit. He explained that Roosevelt’s Resolution Trust Corporation (RTC) was created to take over the debts of insolvent lending institutions, while this time, the government had prevented such failure.
Paulson said that “what has gone on here” is “terrible” and “unexcusable,” ergo we need new regulations and new policies. He said that the current set of regulations is a patchwork which is outmoded in dealing with our financial realities today, but “we can’t deal with that in a week and we need this legislation in a week.”
BLOOMBERG ON MTP. Brokaw’s next guest was New York Mayor Michael Bloomberg. Bloomberg said that Paulson understands the situation and if there were one guy he’d want running the show right now, Paulson’s the man. He said that the Treasury Department has to act quickly, “though no one knows what they should do.” Bloomberg said that “anything is better than nothing.”
Bloomberg said that underlying the present crisis might be that people are losing their homes, which has the affect also of allowing deserted homes to destroy neighborhoods. He said that people are losing their jobs in industries Congress sought to protect but in so “protecting,” Congress has “caused them not to keep up in a competitive world.” One thing you must do quickly but another will take time and deliberation.
Brokaw likened Paulson’s solution to the Iraq War, which was begun without not enough questions being asked or answers given. He compared Paulson’s plan to the Patriot Act, which “a lot of people” believe was a “big mistake,” which he said was rushed through Congress. Bloomberg said that safeguards can be put in this legislation but there is not the time for the safeguards “we’d want for the long term.” He argued that we are all paying the price because people “wanted something for nothing.”
Bloomberg faulted Congress for ignoring the fundamentals of this country: an energy policy “which makes sense,” infrastructure, health care, et al. He argued that we have different regulations for different industries, designed for the world fifty-years-ago, which has to be pulled together.
Brokaw asked Bloomberg if he was working behind-the-scenes to change the rules, allowing him to run for a third term as NYC Mayor. Bloomberg, almost with a straight face, told Brokaw that he has over 400 days left in his term but was thinking to “maybe be host of this program.” He said he’s sure that MTP pays better than the dollar per year he receives from running New York, New York. Brokaw countered that Bloomberg’s “net work puts all of us to shame.” Bloomberg retorted: “Be that as it may, it’s all going to charity.”
Bloomberg complained that the cause of our country’s problems was that both conservatives and liberals were unwilling to “move to the middle.”
Brokaw helped Bloomberg build himself as the bipartisan sage who understands the problem and wants to build a consensus solution.
PAULSON ON FTN. Host Bob Schieffer’s first guest on CBS’ Face the Nation was Treasury Secretary Hank Paulson. Schieffer averred that this would cost more than the Iraq War. Paulson explained that the Iraq war was expenditures while the assets in this case would be sold. Paulson said that he saw the markets freezing up and a greater difficulty for average citizens getting loans, “we couldn’t allow this to go on,” thus he was moved toward the bailout/seizure. (Maybe Bernanke saw another Great Depression on the horizon.) Paulson emphasized that the whole system was not, in Schieffer’s words, “on the verge of collapse.” He said that the system was choking up.
Paulson insisted that though the taxpayer is at risk, they were always at risk, even worse if the government did nothing.
Schieffer asked what happens if this doesn’t work. Paulson said that he has “every confidence” that Congress will go along with this in the following week.
Schieffer said that this will “send the deficit into uncharted territory,” and he asked if the next President would have to raise taxes to fund the government. Paulson explained again that this is different from spending money; rather, it is “buying assets and selling assets.” We’ll be able to sell the assets depending on what happens in the housing industry and how quickly the markets stabilize.
Schieffer wondered if Paulson were asking foreign governments to help, and Paulson said that they were. This is a global problem, he said.
BARNEY AND SHELBY ON FTN. Next up on FTN were House Financial Services Committee Chairman Barney Frank and Senate Banking Committee ranking Republican Richard Shelby.
Barney said that other things will be tacked onto the bill, such as a stimulus package and limits on executive compensation. He wants to limit foreclosures. He’s for a dirty bill, but he calls it “clean.”
Shelby said he would be willing to add some of Barney’s stuff, and he forecast that the cost would be “at least” a trillion dollars, not Paulson’s predicted $700-billion. He accused Paulson and Fed Chairman Ben Bernanke of “stumbling from crisis to crisis.”
Barney said that this “strengthens the argument for a surtax” on the wealthy. (“People who make over $1-million a year,” he said, are “those responsible for this crisis.”
Shelby said that “as a Republican,” he’s not for taxes, but we have to add a trillion dollars to the debt. This is, he said, “The Mother of All Bailouts.” On executive salaries, he said that this should be determined by the private board of the private firm; if the federal government is involved, he said, it is another story.
Shelby said that this crisis was caused by greed and a lack of regulations. We need more regulations. As Schieffer was leaving the segment, Barney interrupted to say a “Sunday morning… Amen to Senator Shelby.” Schieffer opined that it was worth the interruption just to hear him say this.
PORTMAN AND SPERLING ON LE. On CNN’s Late Edition, host Wolf Blitzer spoke to former OMB director Rob Portman (for McCain) and former Clinton (Bill) adviser Gene Sperling (for Obama).
Blitzer asked Sperling if Congress were ready “just to rubberstamp what the Bush Administration wants.” Sperling said that Obama thinks that there should be a stimulus package attached, and there should be accountability, expanded authority, and they need a degree of reciprocity, as Dodd recommended.
Portman said that he’s “on board” and he’s pleased to see that Paulson has been received in a bipartisan manner. This will help Main Street as well by allowing them to receive loans. He said that it need not be socialistic depending on how it is done. How much of the money spent by the taxpayers will be recovered when the assets are sold? He thinks that much of it can be recovered.
Sperling agreed and said that those who are being helped could not just turn around and throw people out of their homes. Reciprocity. He faulted those who “reject common sense regulations,” and even a “conservative Administration” (Bush’s?) has to finally admit that regulation is necessary.
Blitzer played a clip of Obama saying that he had warned of this crisis ‘months ago” and that McCain had preached deregulation. Portman said that this was wrong; McCain was always for common sense regulation. And it was McCain who two years ago warned about the looming problems in the financial markets. Obama rejected the bill.
Sperling said that McCain was not accurate but Obama was. He faulted McCain for being “always for less regulation.”
Portman said that we had to stop playing politics with this situation. He accused Sperling of taking McCain’s quotes out of context, saying that he’s talking about things that he’s not. He said that it is too bad the McCain camp has to waste time responding to this nonsense.
Sperling argued that Obama is taking the more serious- bi-partisan approach.
Portman said that McCain has always been for “smarter, tougher regulation.” Portman added, though, that he did not share McCain’s sentiment that Chris Cox should be fired from the SEC.
= = = = = = = = = =
These are the things which were said on the talk shows this morning. You know the drill.
Have at it!